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Rockefeller to Marketing Data Giants: You're On Notice

'We Have a Feeling People Are Getting Scammed or Screwed'

Call it a fitting culmination to a year in which corporate and government data tracking and related privacy concerns became topics of conversation around the watercooler and kitchen table. Today the Senate Commerce Committee held a long-awaited hearing about the consumer-data-broker industry.

"We have a feeling people are getting scammed or screwed," said Senator Jay Rockefeller, D-W.V., whose office sent inquiries to several data brokers in the past year. He called out data giants Acxiom, Epsilon and Experian, threatening to use more forceful ways of getting them to divulge information about how they do business and with whom.

One concern shared by Mr. Rockefeller and privacy advocates is predatory marketing activity conducted by financial firms or other companies targeting vulnerable groups such as the impoverished or immigrant populations. Another concern is the practice of scoring individuals determined by algorithmic data analysis and serving them with tailored offers. In some cases that could involve higher interest rates for loans or dynamic prices for products based on prior web behavior or demographic data.

"To date they have not given me complete answers," said Mr. Rockefeller of Acxiom, Epsilon and Experian. "I'm putting these three companies on notice today...that I am considering further steps and I have steps I can use to get this information."

Experian has submitted 3,000 pages of response documents to the Committee, said Tony Hadley, senior VP of government affairs and public policy for Experian, a witness at during today's hearing, "What Information Do Data Brokers Have on Consumers, and How Do They Use It?"

In part, Mr. Rockefeller believes the data brokers have not been forthcoming enough to provide names of clients buying data from them. Most companies consider such information to be proprietary and are often reluctant to divulge it.

The senator has been vocal on privacy issues for years and is sponsor of the Do-Not-Track Online Act, originally introduced in 2011. The bill calls on the Federal Trade Commission to oversee development of a DNT mechanism, and was co-sponsored by Connecticut Democratic Sen. Richard Blumenthal.

With the inquiry and today's hearing, the Committee aimed to illuminate the often-obscured dealings of data brokers, firms that operate in a sprawling industry -- slicing, dicing, enhancing, aggregating, categorizing and re-categorizing information on consumer purchases, website visits, demographics, interests, locations, political beliefs and voting habits.

The main takeawkay: Data brokers aggregate a vast amoung of information, some of which is very personal, and they prefer to do it as covertly as possible. Notes the report, "Three of the largest companies Acxiom, Experian, and Epsilon to date have been similarly secretive with the Committee with respect to their practices, refusing to identify the specific sources of their data or the customers who purchase it."

Calling himself "tech-savvy" during the hearing, new Committee Member Sen. Cory Booker of New Jersey noted that he was unfamiliar with the ad industry's self-regulatory program allowing people to opt-out from data collection for behavioral advertising.

At the end of today's two-hour hearing, Sen. Rockefeller suggested that incentives provided to loyalty program members could be considered discriminatory.

Though the privacy stalwart's five-term senate career is drawing to a close, Sen. Rockefeller indicated the need for the Commerce Committee to carry on an issue he's been instrumental in pushing, consumer privacy.

"I'm here to say this is a very seriuous situation.... We've got to continue on this thing."